Sensex gains 128 points as food inflation eases futher

Erasing initial losses, the Bombay Stock Exchange benchmark Sensex on Thursday gained for the second day, moving up 128 points in fag-end buying of bluechips such as RIL and ICICI amid a sharp dip in food inflation and firm trend in European markets.

After a weak start in line with Asian markets, the BSE 30-scrip index eventually gained 128.15 or 0.82 per cent to 15,813.36 as funds picked up stocks at low levels. The gauge had fallen to 15,472.70 at the outset but made recovery in the last 30-minutes of trade.

The 50-scrip NSE index Nifty rose 40.70 points, 0.87 per cent, to 4,733.85. Intra-day it dipped to a low of 4,632.95.

Brokers said trading sentiment improved on data that food inflation fell to 4-year low of 1.81 per cent for week ended December 10, from 4.35 per cent in the previous week. It was further supported on higher openings in Europe.

RIL move up on reports that it has invested in Terra Power, a nuclear design and engineering company. The stocks rose 1 per cent.

The realty sector index gained the most, 2.91 per cent, followed by banking which rose 2.27 per cent. Among banking stocks, ICICI Bank rose to a two-week high by adding 3.52 per cent.

SBI was up 2.79 per cent to Rs 1,668.45.

Barring IT and Teck sectors, all sectoral indices closed higher. IT index fell 1.20 per cent to 5,680.19, as Infosys, the second most-heaviest on Sensex fell 1.07 per cent.

Teck sector index fell 1.10 per cent to 3,339 as Bharti, Idea and Tata Comm declined after the government asked mobile phone operators to terminate pacts for providing 3G services in the regions where they don?t have the spectrum.